Tonight:
5°c
There was always something reassuring about Williams & Glyn's. The bank appeared to have been around forever, with a good, solid name, when in fact, it hadn't been at all. Royal Bank of Scotland merged three subsidiaries — Williams Deacon's Bank; Glyn, Mills & Co; and the English and Welsh branches of The National Bank — to form Williams & Glyn's in 1969.
It marketed itself on being friendlier than the rest — Williams & Glyn's was the first clearing bank to introduce free banking for personal accounts in credit. Its lines of command were shorter and it was amenable to clients' financial problems. The bank even had a savings plan called “Nest Egg”.
Then it vanished, its fate sealed by strategists within the growing behemoth that was RBS, who decreed that henceforward, Williams & Glyn's 332 branches had to bear the “RBS” brand. But now, in a move that happens rarely in business these days, the old marque is to make a comeback. For that we have to thank a 68 year-old Dutch politician who chairs the Poets of All Nations literary foundation, Rembrandt House Museum and Delta Psychiatric Hospital.
To focus on those three posts would give a wrong picture of Neelie Kroes, the EU Competition Commissioner. This is a woman, after all, who positively basks in her toughness, lapping up sobriquets such as Nickel Neelie or Steely Neelie, in reference to another similarly robust female — Mrs Thatcher, the Iron Lady.
Also, it is incorrect to say that Kroes was herself responsible for resurrecting Williams & Glyn's. That was down to Stephen Hester and his acolytes at RBS who plucked the name off the shelf and are using it to embrace a clutch of RBS retail operations now up for sale on the orders of Kroes. The move was not of Hester's making as he is at pains to point out. “These disposals do not improve competition or make it any easier for us to return money to the taxpayer,” says Hester, chief executive of part-nationalised RBS. As well as 318 branches of RBS in England and NatWest in Scotland, Kroes has taken an axe to other parts of RBS, including its Global Merchant Services, which handles 5 billion card transactions a year and RBS Sempra, its US joint venture energy trader. RBS is also selling its insurance businesses.
At Lloyds, Kroes has forced the offloading of a higher-than-expected 600 branches, including all its Cheltenham and Gloucester network and the entire Lloyds TSB in Scotland plus 280 Lloyds TSB branches in England, the TSB brand and its online arm, Intelligent Finance. And she has given her approval to a plan by the UK Government to split state-owned Northern Rock in two and sell off the “good” bit of the bank.
Those at the British end who have negotiated with Kroes speak of her determination. While the outcome might come as a shock to bankers and UK officials who are not used to being bossed around, nobody who knows Kroes is the least bit surprised.
“Neelie has proved to be a very effective Commissioner in the most difficult of circumstances,” says Peter-Carlo Lehrell, founder and chairman of public affairs consultancy FIPRA. “The general view is that she has done a very good job,” said an English solicitor specialising in EU competition law.
It was entirely predictable, Brussels experts maintain, that the EU would target the British banking bailout. “They are very hard on state aid,” said the lawyer. “It's one of the few things the Commission as a whole can agree on,” and that, of course, meant Kroes and a torrid time for Hester and co.
“She is extraordinary. Prickly. Focused. Like hugging barbed wire,” said a senior City insider. When I repeat this to the solicitor, he laughs. “It's true, Neelie has never tried to portray herself as cuddly. She loves all that Nickel Neelie and Steely Neelie stuff.”
Things, he said, were different when she started at the EU in 2004. “Our heads were in our hands because she did not understand competition law. That has now improved. One thing that hasn't changed is her English. It's still not great — she will never do a Q &A for instance, because that would leave her too exposed. She's now far more comfortable than she was - she's able to say to people, judge me by my output'.”
Those results are impressive: settlement with Microsoft; massive fine against Intel (prompting Forbes, the US business house journal to use the headline Caught In The Kroes-Fire'); and a succession of cartel-busting cases in a variety of industries (cartels are pet hates of hers). Only in mergers has her record been more mixed. Except for Ryanair's pursuit of Aer Lingus — which was almost inevitable — no major deal has been blocked.
Kroes has not acted on her own. The Commissioner has built up a strong team of advisers and assistants, many of whom are women and are loyal to her. She's been helped in her task by the nature of the competition brief — it's a rare EU commissioner job that carries genuine clout.
There is an element too, believe Brussels insiders, of Kroes taking delight in going after the biggest companies and the mightiest member states. “She wants to be seen to be tough on bigness,” said the lawyer. “Nothing she chases is too big, no remedy she seeks is too small.”
In Holland, she made her name as an MP for VVD, the free market party, then later as transport minister. In that post she became famous for overseeing a programme of privatisations. Twice married with one son, her second husband of 12 years was Bram Peper, one of her leading political opponents. Today she is divorced.
After quitting politics, she went into academia and business, collecting a host of directorships including Thales, Volvo, Nedlloyd and Lucent Technologies.
Then came the call to Brussels — an appointment that was heavily criticised because of her links to major companies.
Since taking the post, Kroes has gone out of her way to put distance between herself and her past ties, standing down if a decision affects an industry in which she was involved. It's as if she has taken the attacks personally and has deliberately chosen, with typical zeal, to go to the opposite extreme.
Her time as commissioner is now almost up — she steps down in January. There are rumours she would like to stay on, others that she will retire to be near her son in the US. But at the moment she is sitting pretty as she recently made clear to the hapless person who made the mistake of asking her what her crowning achievement was. “Crowning achievement!” she snorted. “I'm still commissioner and I'm not finished yet.”
